Navy awards $28.4M for H-53 aircraft parts, a sole-source contract to Sikorsky Aircraft Corporation

Contract Overview

Contract Amount: $28,404,136 ($28.4M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2018-10-10

End Date: 2019-09-30

Contract Duration: 355 days

Daily Burn Rate: $80.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER UNDER PBL CONTRACT IN SUPPORT OF DYNAMIC PARTS FOR H-53 AIRCRAFT

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06615

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $28.4 million to SIKORSKY AIRCRAFT CORPORATION for work described as: DELIVERY ORDER UNDER PBL CONTRACT IN SUPPORT OF DYNAMIC PARTS FOR H-53 AIRCRAFT Key points: 1. Contract awarded for essential parts supporting the H-53 aircraft, crucial for naval operations. 2. Sole-source award to Sikorsky Aircraft Corporation, the original equipment manufacturer, raises questions about price competition. 3. Delivery order under an existing Performance-Based Logistics (PBL) contract suggests a long-term support relationship. 4. The contract duration of 355 days indicates a focused effort on immediate parts needs. 5. Fixed-price contract type aims to control costs, but limited competition may hinder optimal value. 6. No small business set-aside was applied, indicating the primary contractor is likely a large business.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without detailed cost breakdowns and comparisons to similar sole-source parts contracts. However, sole-source awards inherently carry a higher risk of suboptimal pricing compared to competitively bid contracts. The fixed-price nature provides some cost control, but the absence of competition means the Navy relies heavily on Sikorsky's pricing integrity. Further analysis would require access to the underlying PBL contract and historical pricing data for these parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Sikorsky Aircraft Corporation, was solicited. This is common for parts manufactured by the original equipment manufacturer (OEM) where proprietary knowledge or existing support infrastructure limits competition. While efficient for ensuring part compatibility and availability, it bypasses the price discovery benefits of a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. The Navy must rely on negotiation and oversight to ensure fair pricing.

Public Impact

The U.S. Navy benefits from the continued availability of critical parts for its H-53 heavy-lift helicopters. These parts are essential for maintaining the operational readiness of the H-53 fleet, supporting various military missions. The contract ensures the supply chain for specialized aircraft components remains robust. Workforce implications are likely within Sikorsky's manufacturing and logistics operations, potentially supporting skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to sole-source nature.
Lack of competitive pressure may reduce incentives for cost optimization.
Dependence on a single supplier for critical components.

Positive Signals

Fixed-price contract type helps manage cost certainty.
Awarded under an existing PBL contract, suggesting established processes and potential for efficiencies.
Ensures availability of critical parts for a key naval asset.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for OEM-specific aircraft parts is often characterized by limited competition, especially for legacy platforms like the H-53. Spending in this sub-sector is driven by military readiness requirements and the lifecycle of aging aircraft fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar specialized aviation components.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the provided data. The award to Sikorsky Aircraft Corporation, a major defense contractor, suggests the primary work will be performed by a large entity. This limits direct opportunities for small businesses to participate in this specific contract, though they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under an existing PBL contract, the foundational oversight mechanisms are already in place. Transparency is generally maintained through contract databases, though detailed cost justifications for sole-source awards may be less publicly accessible. The Defense Contract Audit Agency (DCAA) may also provide audit oversight.

Related Government Programs

H-53 Helicopter Support Contracts
Naval Aviation Parts Procurement
Performance-Based Logistics (PBL) Contracts
Sole-Source Defense Contracts
Aircraft Component Manufacturing

Risk Flags

Sole-source award
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to SIKORSKY AIRCRAFT CORPORATION. DELIVERY ORDER UNDER PBL CONTRACT IN SUPPORT OF DYNAMIC PARTS FOR H-53 AIRCRAFT

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $28.4 million.

What is the period of performance?

Start: 2018-10-10. End: 2019-09-30.

What is Sikorsky Aircraft Corporation's track record with the U.S. Navy, particularly concerning H-53 aircraft support?

Sikorsky Aircraft Corporation, now a subsidiary of Lockheed Martin, has a long-standing and extensive track record with the U.S. Navy, particularly as the original equipment manufacturer (OEM) for the H-53 family of heavy-lift helicopters (CH-53 Sea Stallion, MH-53 Pave Low, CH-53K King Stallion). They have historically been responsible for the production, sustainment, and upgrade of these critical platforms. Their involvement spans decades, encompassing numerous contracts for aircraft, spare parts, maintenance, and logistics support. While their technical expertise is well-established, like many large defense contractors, they have been subject to scrutiny regarding contract pricing and performance on various programs. The Navy's continued reliance on Sikorsky for H-53 parts, including this sole-source award, underscores their critical role in maintaining the operational readiness of this vital naval asset.

How does the pricing of this $28.4M delivery order compare to similar sole-source contracts for aircraft parts?

Directly comparing the pricing of this $28.4 million delivery order without access to the specific parts, quantities, and the underlying Performance-Based Logistics (PBL) contract's pricing structure is difficult. However, sole-source contracts for OEM-manufactured aircraft parts are generally expected to be higher than competitively procured items due to the lack of market pressure. The Navy likely negotiated this price based on historical data, established rates within the PBL agreement, and potentially cost-plus-incentive-fee elements if applicable. Benchmarking would require analyzing the price per part, the total cost relative to the aircraft's value, and comparing it to similar sole-source awards for components of comparable complexity and criticality across different military aircraft programs. Without this granular data, a definitive value-for-money assessment remains challenging, but the inherent risk of higher pricing in sole-source scenarios is a key consideration.

What are the primary risks associated with this sole-source contract for the Department of the Navy?

The primary risk associated with this sole-source contract is the potential for elevated costs due to the absence of competition. Sikorsky Aircraft Corporation, as the sole provider of these specific H-53 parts, faces limited pressure to offer the most competitive pricing. This can lead to the Navy paying more than it might in a competitive environment. Another risk is supplier dependency; the Navy's reliance on a single source for critical components can create vulnerabilities in the supply chain, potentially leading to delays or shortages if Sikorsky encounters production or logistical issues. Furthermore, without competitive benchmarking, ensuring optimal value and incentivizing innovation or cost-saving measures from the contractor can be more challenging for the Navy.

How effective is the Performance-Based Logistics (PBL) framework in ensuring the performance and value of this delivery order?

The Performance-Based Logistics (PBL) framework aims to ensure effectiveness and value by shifting the focus from acquiring parts to achieving specific performance outcomes, such as system readiness or parts availability. For this delivery order, the PBL likely establishes metrics and incentives tied to the supply of H-53 parts. If the PBL contract is well-structured, it should incentivize Sikorsky to provide parts efficiently and reliably to meet the Navy's operational needs. However, the effectiveness is contingent on the clarity of performance metrics, the robustness of incentive structures, and the Navy's ability to monitor and enforce these terms. While the PBL framework provides a structured approach, the sole-source nature of this specific delivery order means that price competition is not a direct driver of value within this particular transaction, although the overall PBL might incorporate price considerations.

What are the historical spending patterns for H-53 aircraft parts and support by the Department of the Navy?

Historical spending patterns for H-53 aircraft parts and support by the Department of the Navy typically involve significant, long-term investments due to the platform's extended service life and critical role. Spending is often characterized by a mix of large-scale procurement contracts for new aircraft or major upgrades, and a continuous stream of contracts for spare parts, depot maintenance, and sustainment services. Performance-Based Logistics (PBL) contracts have become increasingly common for managing the lifecycle support of such platforms, aiming to improve readiness and control costs over time. Spending can fluctuate based on fleet readiness requirements, modernization programs (like the transition to the CH-53K), and the availability of parts from the original equipment manufacturer, Sikorsky. Sole-source awards for specific components are a recurring feature, reflecting the specialized nature of the H-53 systems.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 6900 MAIN ST, STRATFORD, CT, 06614

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,404,136

Exercised Options: $28,404,136

Current Obligation: $28,404,136

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $21,562

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038316D001F

IDV Type: IDC

Timeline